For anyone who has ever wondered who supplies the maps for in-vehicle navigation systems, it's a good bet the answer will turn out to be NAVTEQ Corp. That's because the Chicago company says it creates and sells nine of every 10 such electronic maps used today.
Clifford Fox, vice president of vehicle applications for NAVTEQ, is responsible for getting more maps into vehicles. But navigation systems still are fairly pricey options - about $2,000 for many vehicles.
NAVTEQ also has to persuade automakers to buy hardware it does not make - the navigation system itself - so it can sell more electronic maps and support services.
Fox talked with Staff Reporter Greg Bowens at NAVTEQ headquarters.
What is happening with dealers and navigation systems?
Because awareness of navigation systems is relatively low at the consumer level, it is more challenging than we would like it to be for dealers. When salespeople have to explain what a navigation system is and what benefits it provides, that adds time and energy to their sales cycle. So we are trying to give them the tools and materials they need to educate people when they come in the showroom.
Tools such as?
Cash incentives always help.
What percentage of new-car customers are buying navigation systems?
About 14 percent. The range of individual vehicle take rates goes from highs of 70 to 80 percent to lows of less than 10 percent depending on the car model, price and how navigation is marketed by a car company.
Where is the market growth for navigation systems?
Pickup trucks and the mid-level vehicle segment are the growth areas.
In some parts of the country, pickups have back seats and are a family vehicle, which has a similar application as the SUV.
The second segment is the mid-level bread-and-butter segment. The Japanese vehicles in this market already offer navigation - Honda Accord, Toyota Camry and Nissan Maxima. We believe we will see their U.S. counterparts come along as well.
How do you get navigation systems into the low end of the market?
The price needs to come down in order for that to happen. According to research, the magic price point range is from $500 to $1,000 for an embedded navigation system. That could happen. Higher-priced systems could have all the bells and whistles - full-color screen, live traffic updates and voice technology - while lower-priced ones may not.
What can we expect to see in the next five years with navigation systems?
You will see the prices coming down. You will see systems get easier to use. You will also see electronic maps used in more applications than just navigation. People are looking to apply map information for headlight aiming, adaptive cruise control, transmission control and improved braking control.
You will also see a proliferation of electronic devices such as cell phones, music players and gaming systems get carried into the car with the ability to also function like a navigation system.
You may e-mail Greg Bowens at